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Challenger Acquisitions Closes Sale of Ferris Wheel Specialist Starneth.


31 January 2017 - UK-based blank check company Challenger Acquisitions Ltd. (LSE: CHAL) has disposed of its entire interest in engineering and manufacturing firm Starneth Europe B.V. and Starneth Holding B.V., the company said.

Challenger said that the sale of Starneth provides for contingent consideration, an on-going cooperation agreement for Challenger to provide potential funding options for the developers of select Giant Observation Wheel projects and the extinguishing of all cash obligations owing by Challenger to the former owners of Starneth and to any companies controlled by these former owners.

The new owner of Starneth is Sungailiat B.V., a company controlled by Chiel Smits, CEO of Starneth.

Upon closing of at least two major development projects by Starneth over the next two years, including the GOW project in Jakarta where developer's funding arrangements are awaiting finalisation, Challenger will receive up to USD 6m in fees less a payment of EUR 1.25m related to the cash payment that the company was due to pay to the former Starneth vendors in two equal instalments on 15 January 2017 and 15 April 2017.

One common equity unit of New York Wheel LLC will continue to be pledged to the former Starneth vendors until this payment of EUR 1.25m has been completed.

Following the Sale, Challenger will retain its equity stake in the New York Wheel LLC, with a minimum of two equity units and up to three equity units depending on the closure of at least one project by Starneth in the next two years.

The cash fees of up to USD6 m that Challenger would receive are based on two fee agreements signed with Sungailiat/Starneth and are calculated based on the incoming cash receipts from the developers for these projects.

The cash payment of EUR 1.25m from Challenger is contingent on these projects commencing and paid only once Challenger starts receiving these cash fees.

Challenger and Sungailiat B.V. have signed a five-year cooperation agreement whereby Sungailiat/Starneth can provide the design, engineering and project management for select GOW projects and Challenger can provide potential funding options for the developers of these select projects, including some which may result in an equity stake for Challenger.

Country: UK

Sector: Machinery/Engineering

Target: Starneth

Buyer: Challenger Acquisitions Ltd.


Deal size in USD: 7.80m

Type: Corporate Acquisition

Financing: Cash and Stock

Status: Closed

Buyer advisor: , ,


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Publication:M & A Navigator
Geographic Code:9INDO
Date:Jan 31, 2017
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